Google is beta testing a different business formula for its AdSense product that eases up on its lucrative pay-per-click model in favor of a pay-per-action model. The new program could help address the click fraud problem that dogs the per-per-click sector of the online ad industry.
The idea with the beta test is to provide advertisers more latitude with ad contracts by stipulating payment only for pre-determined actions that result from a Google ad, such as a certain product purchase or signing up for a newsletter.
Once advertisers sign-up for and are selected by Google to participate in the beta test, they can can create text or image ads in addition to using Google’s new text link ad format, which are brief text descriptions that take on the characteristics of a publisher’s page.
Could the pay-per-action model help Google lead the way in addressing the industry’s problem with click fraud? It could, if advertisers are provided more certainty that they are being charged for clicks made by humans, rather than automated programs, for example.
Photo by Google.
FranchiseBrief.com on March 28th, 2007 at 3:15 pm
That’s a great idea! Google is always amazing me with how they come up with such good ideas. This new system will definitely make lot of sense for adwords advertisors by saving them a lot of money.
Danny on March 29th, 2007 at 1:39 am
Google is finally entering the affiliate network business; good for them. However, this doesn’t change anything regarding click fraud. The basic issue is that there is an economic benefit to advertising *without* commissions, but such a system also invites fraud. The analogy to click fraud would be newspapers lying about their subscription/distribution numbers.
There will not be a technological solution to click fraud, only an economic one. Advertisers will continue to use pay-per-click advertising as long as the conversion numbers are better than the alternatives. If fraud becomes such a big issue that PPC is no longer viable, then advertisers will go to the alternatives, which include pay-for-performance.
Bill on May 12th, 2007 at 7:30 am
MSN I NIIPET
MSN
Advertiser on March 23rd, 2008 at 10:45 pm
Thats a great idea!
http://www.worldstart.com/tips/tips.php/3165